Personal insolvencies on the rise in Scotland

Bankruptcy awards are down 6.5 per cent on the same period a year ago with 1,236 awarded for the first quarter of 2018-19, covering the period from 1 April to 30 June 2018. This figure is below the 1,322 awarded in the same quarter for 2017-18. There was a marked increase in PTDs, with 1,972 PTDs protected in the first quarter of 2018-19, up from 1,547 in the same quarter last year.

The Scottish government’s Debt Arrangement Scheme (DAS), which allows people to take control of their finances and repay their debts without facing insolvency or further action being taken against them, also showed a rise of 8.5 per cent compared to the same quarter a year ago.

There were 648 debt payment programmes approved under DAS in the first quarter of 2018-19, compared with 597 in the same quarter for 2017-18.

A total of £9.5 million was repaid through the scheme in the quarter, similar to the £9.4 million the previous year.

Emma Widdowson, legal director in Addleshaw Goddard’s business support and restructuring team, said: “While corporate insolvencies in Scotland may have fallen by five per cent in the first quarter of 2018, they remain up on the same period last year.

“That, together with the personal insolvencies increase of 27 per cent, indicates people are suffering from the woes of the retail, leisure and hospitality sectors. An additional rise in unavoidable costs such as petrol, diesel, utility bills – albeit the good weather may mean lower gas bills – and general price rises, has increased costs being passed on to the consumer.

“The potential to create a perfect storm with job losses following the administrations of Poundworld, Calvetron Brands Limited – which owns Jacques Vert, Dash & Eastex – and Gaucho, with the immediate closure of all Cau Restaurants – so soon after the closures of Toys R Us and Maplin stores, to name but two, is something we should all be aware of.

“Anyone suffering financial difficulties should seek help sooner rather than later. Avoiding the situation and hoping it will go away simply will not work. Individuals may be able to learn from the corporates and seek to agree a compromise with creditors to avoid going bankrupt.”